U.S. Stock Market Plummets: Nvidia, Bitcoin Trigger Major Drop

BREAKING: The U.S. stock market is in turmoil as major players like Nvidia and Bitcoin trigger a sharp decline. Just moments ago, the S&P 500 fell by 0.9%, while the Dow Jones Industrial Average plummeted 557 points, or 1.2%. The Nasdaq composite also sank 0.8%.

This market downturn comes as Nvidia, a key driver in the artificial intelligence sector, faced a 1.8% drop, contributing significantly to the overall decline. Other AI-related stocks also suffered, with Super Micro Computer experiencing a staggering 6.4% loss. The fallout extends beyond tech, as Bitcoin dipped below $92,000, down from nearly $125,000 last month, causing Coinbase Global to drop 7.1% and Robinhood Markets to fall 5.3%.

Market experts have long warned that the U.S. stock market might be poised for a correction, particularly as prices soared since April. High expectations surrounding AI stocks have driven significant gains, but analysts caution that if Nvidia and similar companies do not exceed earnings forecasts in their upcoming reports, it could trigger a broader market decline.

Despite Monday’s losses, Nvidia is still up 39% for the year, following a period where its stock price doubled in four of the last five years. Investors are now anxiously awaiting Nvidia’s earnings report on Wednesday, which could either bolster confidence or fuel further declines.

Other companies are feeling the pressure as well. Aramark saw a 5.2% drop after reporting profits that fell short of analyst expectations. The company predicts a profit growth of only 20% to 25% in the upcoming year, below prior forecasts. In contrast, Alphabet shares rose 3.1% following news that Berkshire Hathaway acquired a $4.34 billion stake in the tech giant.

The overall market closed with the S&P 500 down 61.70 points to 6,672.41, the Dow down 557.24 to 46,590.24, and the Nasdaq down 192.51 to 22,708.07. The looming uncertainty regarding the Federal Reserve’s interest rate strategy remains a significant concern for investors. Following the government shutdown, the delayed jobs report for September is set to be released on Thursday, which could further sway market sentiment.

Market analysts, including Barry Bannister of Stifel, suggest that the Fed may only cut interest rates in response to a slowing economy, indicating that the era of easy monetary policy could be coming to an end. This environment poses challenges for stock prices, as Bannister noted, stating that the “Fed’s ‘free lunch’ is over.”

As these developments unfold, investors are urged to stay alert for further updates and potential market shifts. The next few days may prove critical in determining the direction of the stock market.